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Tuesday, 06 September 11
INDONESIAS PROPOSED COAL EXPORT BAN MAY HAVE IMPACT ON THE INDIAN POWER SECTOR - DIPESH DIPU
.jpg) COALspot.com - This is a special interview about Indonesian proposed coal export ban by 2014, with Mr. Dipesh Dipu, Director of Deloitte Touche Tohmatsu, India.
The Indonesian government is currently in the process of drafting a new regulation that could ban the export of low-grade coal by January 12, 2014. This is likely to apply to coal below 5700 kcal/kg on air dried basis in value.
As of now Indonesia is producing around 150 million tons of coal with calorific value below 5700 GAD (according to chairman of Indonesian coal mining association). However by 2014, there are possibilities the total production of below 5700 GAD coal may reach more than 200 million per annum.
Will Indonesian coal export ban impact on the Indian fuel requirements?
The earlier grade of coal that was being considered for proposed ban has GCV of 5100 kcal/kg of less (adb), which can be comparable to 3800-4200 kcal/kg (arb) domestic coal available in India. This grade of coal has found favor in India primarily due to likely price advantage but economics of power generation based on such grade of imported coal may be a suspect. This considering that such grades of coal from Indonesia typically have high moisture content, which makes transportation cost per unit of energy generated higher. The quantum of the low grade of coal (<5100 kcal/kg adb) procured from Indonesia is likely to remain relatively low.
However, if the new definition of low grade coal is applied (<5700 kcal/kg adb), it may be reasonable to believe that such a ban may have impact on the Indian power sector as volumes in this grade of coal are expected to rise in the proportion of coal exports to India. Several of the acquisitions made by Indian power generation companies in Indonesia have been in coal blocks that will produce coal of this grade, and a blanket ban on the exports can jeopardize power plant development in India.
On the other hand, the domestic Indonesian market may not be prepared to consume all the coal mined of this grade in view of the power generation capacity addition plans in Indonesia. In such a case, the coal mine development is likely to be deferred. The Indonesian law makers may need to reconsider domestic market demand, investment climate in coal sector and impact of the legislation on the export revenues.
What is the alternative source for Indian power industry if the proposed coal export ban come into effect by 2014?
Indian power generation companies have been forced to look out for coal assets abroad due to the investment and regulatory environment within the country. India boasts of more than 110 billion tonnes of coal reserves, which largely fall within a 300 meters of depth. If the regulatory and investment environment is amended to allow greater participation of private sector Indian dependence on imports will be reduced.
However, for imports, India will continue to look at Indonesia, South Africa, Australia and newer destinations like Mozambique and Columbia. But these sources also have constraints, domestic demands in South Africa is likely to restrict quantum jump in exports out of South Africa. Indonesia has also proposed domestic market obligations. Mozambique may have infrastructure constraints for large volumes of coal being transported from Tete province to ports of Maputo, Ncala or Beira. Australian coal is of high quality but may have higher costs of mining and transport.
What would be the additional cost if Indian consumers switch their sourcing origin from Indonesia?
Indonesia has competitive advantage due to its geographical closeness. However, on a per tonne basis, assuming comparable quality, costs of transport may make marginal difference when compared with South Africa and Mozambique.
When compared to Australian coal, due to the high quality, cost of energy may well be comparable even though shipping costs are higher. Between Indonesian coal (5500 kcal/kg adb priced at USD 90 per tonne) and Australian coal (6500 kcal/kg adb priced at USD 120 per tonne), indicative variable cost difference of power generation may be about Indian Rupees 0.20 to 0.30 per kWh (electricity unit) in favor of Indonesian coal.
Will it affect Indian economy growth or this coal export ban is ignorable as India can easily identify alternative sources of fuel?
The magnitude of growth in power generation in India will necessarily mean that coal will remain the mainstay. Natural gas has had issues of availability. Nuclear plant development is facing socio-political challenge in view of the risks of technology failure. Development of hydel power has also faced issues of land acquisition, rehabilitation & resettlement apart from the technical issues of hydro-geological features. Renewable sources such as solar and wind generation are still projected to constitute a small portion of India power generation mix. Identifying an alternative source that can match coal in its accessibility, availability and affordability in the context of scale of capacity addition required in India is a challenge.
What is the Indian government's role on this issue, whether government has to come out with the solution such as easing Indian mining and environment law, open up mining for foreigners, G2G arrangement, etc…?
There is a need to look at domestic sources with pro-active and constructive approach and make all necessary legal and statutory amendments that make the resources available and mineable. Easing the regulations may not be one of such measures but making those regulations work in sync with each other in a time bound and predictable manner must certainly be.
There is certainly a case for opening the domestic coal sector for private participation, including independent miners, and for foreign participation so that newer technology and enhanced scale of operations are implemented in India. The regulation also needs to permit risk capital to come in for prospecting and exploration.
For imports the G2G relations can be leveraged to secure coal assets. India has good relationship with Indonesia and has also signed a tax treaty with Mozambique in 2010 which will facilitate investments. Government may also engage with these countries to ease exports to India and extend fiscal support to coal mining companies investing in mining and associated infrastructure development.
About Dipesh Dipu
Dipesh Dipu works as Director with Deloitte Touche Tohmatsu India Pvt. Ltd in the Energy and Resources consulting practice of the firm and anchors the Firm’s initiative in the mining and metals sectors.
He is a mining engineering graduate from Indian School of Mines and is a Chartered Financial Analyst (CFA). He has also done executive program in business management from Indian Institute of Management Calcutta. Dipesh has recently been awarded the Abheraj Baldota Gold Medal for the Young Mining Engineer of the Year 2007 by the Mining Engineers’ Association of India in recognition of his contributions in the improvement of mining industry in India.
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Tuesday, 13 October 09
INDIA INTERESTED IN AMERICAN COAL
UPI reported that, Coal India Ltd. in its global expansion efforts is now interested in coal properties in the United States.
The Business Standard ...
Tuesday, 13 October 09
RIVERSDALE MAY USE ZAMBEZI RIVER TO TRANSPORT MOZAMBIQUE COAL
Mining Weekly reported that, ASX-listed coal-miner Riversdale Mining would submit a feasibility study and an environmental-impact study (EIS) for it ...
Monday, 12 October 09
INDONESIAN COAL MINER SAYS PLANS IPO IN 2010
Reuters reported that, Indonesian coal miner PT Bhakti Energi Persada plans an initial public offering in the first quarter of 2010 to develop coal ...
Monday, 12 October 09
BISICHI MINING FINALIZES COAL SUPPLY CONTRACT FOR 2010-2012
Small Cap News reported that, Bisichi, the South Africa based coal mining group, has agreed a three year coal supply contract between its principal ...
Monday, 12 October 09
SHANDUKA BUYS SACMH RICHARDS BAY COAL ALLOCATION
* Shanduka Coal takes SACMH 500,000T export space
* RBCT must approve any change of ownership
Reuters reported that, South Africa's Shanduka Co ...
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- Vijayanagar Sugar Pvt Ltd - India
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- Planning Commission, India
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- Orica Australia Pty. Ltd.
- Meralco Power Generation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Malabar Cements Ltd - India
- PNOC Exploration Corporation - Philippines
- Videocon Industries ltd - India
- Global Business Power Corporation, Philippines
- SN Aboitiz Power Inc, Philippines
- Indo Tambangraya Megah - Indonesia
- Interocean Group of Companies - India
- Mintek Dendrill Indonesia
- Bayan Resources Tbk. - Indonesia
- IEA Clean Coal Centre - UK
- Kumho Petrochemical, South Korea
- Meenaskhi Energy Private Limited - India
- Lanco Infratech Ltd - India
- London Commodity Brokers - England
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Australian Coal Association
- Billiton Holdings Pty Ltd - Australia
- Bhoruka Overseas - Indonesia
- Aditya Birla Group - India
- Goldman Sachs - Singapore
- Standard Chartered Bank - UAE
- Siam City Cement PLC, Thailand
- Rio Tinto Coal - Australia
- Thai Mozambique Logistica
- Sinarmas Energy and Mining - Indonesia
- Electricity Generating Authority of Thailand
- Eastern Energy - Thailand
- Eastern Coal Council - USA
- Toyota Tsusho Corporation, Japan
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- Essar Steel Hazira Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Antam Resourcindo - Indonesia
- CNBM International Corporation - China
- New Zealand Coal & Carbon
- Parliament of New Zealand
- Pendopo Energi Batubara - Indonesia
- Binh Thuan Hamico - Vietnam
- GMR Energy Limited - India
- Semirara Mining and Power Corporation, Philippines
- Australian Commodity Traders Exchange
- Heidelberg Cement - Germany
- PetroVietnam Power Coal Import and Supply Company
- Straits Asia Resources Limited - Singapore
- Iligan Light & Power Inc, Philippines
- CIMB Investment Bank - Malaysia
- Manunggal Multi Energi - Indonesia
- Posco Energy - South Korea
- Ceylon Electricity Board - Sri Lanka
- Grasim Industreis Ltd - India
- Makarim & Taira - Indonesia
- Globalindo Alam Lestari - Indonesia
- Wood Mackenzie - Singapore
- Edison Trading Spa - Italy
- Therma Luzon, Inc, Philippines
- Semirara Mining Corp, Philippines
- Krishnapatnam Port Company Ltd. - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Thiess Contractors Indonesia
- International Coal Ventures Pvt Ltd - India
- Georgia Ports Authority, United States
- Bhatia International Limited - India
- PowerSource Philippines DevCo
- Sical Logistics Limited - India
- ASAPP Information Group - India
- Bukit Makmur.PT - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Riau Bara Harum - Indonesia
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- Madhucon Powers Ltd - India
- Kaltim Prima Coal - Indonesia
- Kartika Selabumi Mining - Indonesia
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- TeaM Sual Corporation - Philippines
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- Medco Energi Mining Internasional
- Bukit Baiduri Energy - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Larsen & Toubro Limited - India
- MS Steel International - UAE
- Petron Corporation, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Karbindo Abesyapradhi - Indoneisa
- Coalindo Energy - Indonesia
- Altura Mining Limited, Indonesia
- Price Waterhouse Coopers - Russia
- Singapore Mercantile Exchange
- Metalloyd Limited - United Kingdom
- Commonwealth Bank - Australia
- Maheswari Brothers Coal Limited - India
- Vedanta Resources Plc - India
- Latin American Coal - Colombia
- Cigading International Bulk Terminal - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Romanian Commodities Exchange
- PTC India Limited - India
- Alfred C Toepfer International GmbH - Germany
- Baramulti Group, Indonesia
- Kideco Jaya Agung - Indonesia
- Jindal Steel & Power Ltd - India
- San Jose City I Power Corp, Philippines
- Port Waratah Coal Services - Australia
- Ind-Barath Power Infra Limited - India
- The Treasury - Australian Government
- Agrawal Coal Company - India
- Indika Energy - Indonesia
- LBH Netherlands Bv - Netherlands
- Marubeni Corporation - India
- ICICI Bank Limited - India
- The University of Queensland
- Leighton Contractors Pty Ltd - Australia
- Tamil Nadu electricity Board
- Indonesian Coal Mining Association
- Tata Chemicals Ltd - India
- Banpu Public Company Limited - Thailand
- Simpson Spence & Young - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Trasteel International SA, Italy
- Borneo Indobara - Indonesia
- Orica Mining Services - Indonesia
- Central Electricity Authority - India
- Minerals Council of Australia
- Petrochimia International Co. Ltd.- Taiwan
- Directorate Of Revenue Intelligence - India
- Wilmar Investment Holdings
- Coal and Oil Company - UAE
- Neyveli Lignite Corporation Ltd, - India
- Kobexindo Tractors - Indoneisa
- Sindya Power Generating Company Private Ltd
- GVK Power & Infra Limited - India
- SMC Global Power, Philippines
- Salva Resources Pvt Ltd - India
- Electricity Authority, New Zealand
- OPG Power Generation Pvt Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Ministry of Transport, Egypt
- Savvy Resources Ltd - HongKong
- Carbofer General Trading SA - India
- Attock Cement Pakistan Limited
- Bank of Tokyo Mitsubishi UFJ Ltd
- Siam City Cement - Thailand
- Dalmia Cement Bharat India
- Anglo American - United Kingdom
- India Bulls Power Limited - India
- Indian Energy Exchange, India
- Asmin Koalindo Tuhup - Indonesia
- Ambuja Cements Ltd - India
- Uttam Galva Steels Limited - India
- Power Finance Corporation Ltd., India
- Star Paper Mills Limited - India
- Indogreen Group - Indonesia
- Gujarat Sidhee Cement - India
- Jorong Barutama Greston.PT - Indonesia
- Deloitte Consulting - India
- Maharashtra Electricity Regulatory Commission - India
- Mercuria Energy - Indonesia
- Cement Manufacturers Association - India
- Bhushan Steel Limited - India
- Bulk Trading Sa - Switzerland
- Energy Development Corp, Philippines
- Barasentosa Lestari - Indonesia
- Sakthi Sugars Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Intertek Mineral Services - Indonesia
- European Bulk Services B.V. - Netherlands
- Bharathi Cement Corporation - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Aboitiz Power Corporation - Philippines
- Merrill Lynch Commodities Europe
- Asia Pacific Energy Resources Ventures Inc, Philippines
- McConnell Dowell - Australia
- Renaissance Capital - South Africa
- Xindia Steels Limited - India
- Sree Jayajothi Cements Limited - India
- Kepco SPC Power Corporation, Philippines
- White Energy Company Limited
- Samtan Co., Ltd - South Korea
- Timah Investasi Mineral - Indoneisa
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- Economic Council, Georgia
- Rashtriya Ispat Nigam Limited - India
- Karaikal Port Pvt Ltd - India
- The State Trading Corporation of India Ltd
- Central Java Power - Indonesia
- Global Coal Blending Company Limited - Australia
- Mjunction Services Limited - India
- AsiaOL BioFuels Corp., Philippines
- Gujarat Mineral Development Corp Ltd - India
- Vizag Seaport Private Limited - India
- Chamber of Mines of South Africa
- GAC Shipping (India) Pvt Ltd
- SMG Consultants - Indonesia
- South Luzon Thermal Energy Corporation
- Kohat Cement Company Ltd. - Pakistan
- Formosa Plastics Group - Taiwan
- Ministry of Finance - Indonesia
- Energy Link Ltd, New Zealand
- Ministry of Mines - Canada
- Mercator Lines Limited - India
- IHS Mccloskey Coal Group - USA
- Kapuas Tunggal Persada - Indonesia
- Bangladesh Power Developement Board
- Indian Oil Corporation Limited
- Africa Commodities Group - South Africa
- Independent Power Producers Association of India
- Sojitz Corporation - Japan
- Sarangani Energy Corporation, Philippines
- Jaiprakash Power Ventures ltd
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